Diageo reports 'good progress' towards environmental goals

Multinational alcoholic beverage company Diageo has reported "notable improvements" in the management of water efficiency and reduction of carbon emissions and waste materials, as well as taking new steps to promote responsible drinking, in the group's latest CSR report.

Diageo is preparing for a future in which the only successful business models will be those that can demonstrate a positive contribution to people and the planet

In Diageo's annual sustainability report, released last week, the Baileys and Guiness maker announced "good progress" across its emissions, water and waste reductions as well as engaging with hundreds of thousands of people through community initiatives.

Diageo chief executive Ivan Menezes said: “Our sustainable development strategy reflects how the elements of our value chain are interdependent and how contributing to society, to communities, and to the environment strengthens our business. This year, we have made good progress towards our environmental goals, with some substantial gains in the management of our water, carbon and waste.”

Green progress

On energy, Diageo saw a 7.7% year-on-year decrease in greenhouse gas emissions in its direct operations. Emissions from direct operations have now fallen by almost 38% since 2007. The group previously had a target to halve emissions from direct operations compared to 2007 levels, but that target has moved five years later, to 2020.

Menezes announced that the company has now introduced another new target, to procure 100% of Diageo’s electricity from renewable sources by 2030.

On water, the group saw an improvement in water efficiency of 12.5% over last year’s already impressive 10% reduction. Diageo is now replenishing 21% of water used in the final products in water-stressed areas through zero-deforestation, delisting of dams, water storage and safe water and sanitation projects.

As a part of the COP21 agreement, Diageo launched a coalition with a variety of other supply company’s including Veolia, Danone and GSK to form the Business Alliance for Water and Climate Change last year in the hopes to reduce risks regarding the quality and availability of water.

And on waste, Diageo refreshed its packaging guidelines that help to promote a circular economy approach in the aim to produce packaging with the lowest possible environmental impact. The firm also recently installed a new anaerobic digestion plant designed to generate two million cubic meters of Biogas from its whisky factory’s waste output, reducing waste and disposal costs. The system produces around 8,000Mwh of thermal energy which is then reused in the factory’s distillation process.

Social responsibility

The drinks giant has also turned to focus on other aspects of social responsibility, including combatting the misuse of alcohol. Menezes addressed this saying Diageo has made “significant progress in our aim to improve the role of alcohol in society and in our work to tackle misuse”. This is evident through Diageo recruiting over 700,000 responsible ambassadors through its training programmes such as the Diageo Bar Academy, DRINKIQ and Learning for Life – almost three-quarters of the way toward their five-year goal of one million.

An interactive version of Diageo’s responsible drinking initiative DRINKIQ has been installed at the Guinness storehouse in Dublin which aims to inform and train the 300,000 visitors per year on responsible drinking. Also, the company is set to introduce new customer information standards by the end of 2016 which will update the labelling to help consumers understand more about its drinks.

Diageo is also looking to make its own supply chain more resilient against global climate and social risks. After becoming signatories of the UN Guiding Principles on Business and Human Rights (UNGP) in 2014, Diageo has compiled a comprehensive human rights assessment (HIRA) review method to assess the company’s human rights impacts, with the first HIRA having already been conducted in February in Kenya.

Additionally, Diageo has continued its partnerships with a variety of NGO’s and policy organisations to aid in its community and environmental efforts. The company partnered with the United Nations Institute for Training and Research (UNITAR) this year in order work to improve road safety and reduce traffic deaths and injuries.

Future thinking

Diageo is looking to produce a sustainable architectural strategy in the near future to help solidify its relations with its farmers and suppliers as a part of its plan to source 80% of raw manufacturing materials in Africa by 2020. From the results gathered from Diageo’s first HIRA, the company is looking to use the data gathered to reinforce risk prevention in land rights and labour standards which will be established globally.

Looking ahead, Diageo says it is fully prepared to adapt to a post-Paris Agreement sustainability climate where those that make a contribution to the planet and the people will be the “only successful business models”.